Twelve staff seeking work on Olympic projects for construction firm Balfour Beatty were cross-checked against an unlawful blacklist which over two decades barred thousands of people working on British building projects.

The workers were subsequently employed by the firm who built the Olympic aquatics centre, but Labour has called for a full investigation. Shadow business secretary Chuka Umunna has described the blacklisting of workers as a "national scandal".

Umunna, who will demand action by the government during a parliamentary debate on Wednesday on the issue, said: "Workers have had their livelihoods destroyed, their reputations tarnished… just because they raised health and safety concerns or were a member of a trade union."

The admission by Balfour Beatty was made to the Olympic Delivery Authority in a letter obtained by Building magazine.

"As well as investigating blacklisting allegations in full, including those relating to public construction projects, ministers need to look again at what changes need to be made to ensure blacklisting is prevented and that this scandal is never repeated again."

The Consulting Association, a firm funded by 20 companies, ran a database for the industry for 30 years. It was seized by the Information Commissioners Office in 2009, but it is only in the last year that the scale of the list has emerged, prompting a parliamentary select committee inquiry and a legal action against one of the alleged founders, Sir Robert McAlpine Ltd.Cullum McAlpine, a member of the founding family behind Sir Robert McAlpine, is due to give evidence to the Scottish affairs select committee next week.

The latest revelation about the involvement of blacklisting on the Olympic site is contained in a letter sent to Olympic Delivery Authority (ODA) chief executive Dennis Hone from Balfour Beatty construction chief executive Mike Peasland.

In the correspondence, obtained by Building magazine, Peasland admits his company used the services of blacklisting organisation the Consulting Association (TCA) in 2008.

He writes that companies within Balfour Beatty's Construction Services UK division "used the services of the Consulting Association prior to February 2009 when the office of the information commissioner aided the Consulting Association's offices". It adds: "We have carried out an internal review of our operating companies. We found that in 2008 we used the Consulting Association in connection with the engagement of 12 operatives".

The admission follows the statement made by former TCA chief officer Ian Kerr in November before a Commons committee that Balfour Beatty, Sir Robert McAlpine and "possibly Skanska" were involved in Olympics blacklisting.

During the debate in parliament next week Umunna will ask the government to examine whether further changes in the law are needed to ensure that appropriate, effective sanctions are in place to tackle and prevent blacklisting.

A Balfour Beatty spokesperson said: "It is a matter of public record that Balfour Beatty used the services of the Consulting Association. However, Balfour Beatty has not used those services since the Office of the Information Commissioner raided the Consulting Association's offices in February 2009 as part of its investigation.

"Since 2009 our company Code of Conduct prohibits the checking of references for job applicants without first obtaining their consent and prohibits the use or support of databases of "blacklisted" people and the supply of information to such databases."